Investors will soon be invited to develop the Tanah Kuning Industrial Zone in North Kalimantan, with the government hoping to expand aluminium business.

The zone extends across 10,000 hectares, but the government will initially focus developing up to 3,000 hectares first.

The government has tipped the area for development because of its high potential for bauxite reserves, the main material in aluminium. Building processing plants close to the source will reduce production costs and increase overall efficiency.

The Ministry of Industry is set to offer smelter complexes, a port and hydro-power plants as basic infrastructure to support investors, General Director of Industrial Zoning Development Haryono said. The power plan is expected to have a 7,080 megawatt capacity, which is enough to smelt 4 million tonnes of aluminium.

To date, Indonesia Asahan Aluminium (Inalum) and Borneo Alumina Prima, affiliated with China’s Hangzhou Jinjiang Group, have shown interest in developing new projects in the zone.

Borneo Alumina Prima entered Indonesia in 2014 with a US$2.54 million initial investment. Now, total investment has reached US$4.5 billion. Previously, the company has built an aluminium factory over a 1,600 hectare plot in Ketapang, West Kalimantan, and is planning another with the capacity to produce 4.5 million tonnes of aluminium annually.

Other Chinese investors will be approached under the plan, in line with the government’s commitment to the One Belt One Road policy. Indonesia and China have planned to work closer together to develop OBOR-related co-operations.

Integrated investment is planned across North Sumatra, North Kalimantan and North Sulawesi for infrastructure and possibly tourism sectors.